A Growing R&D Competitor: China

By December 13, 2006General

To reinforce the value of Congress’ passage of the renewed and strengthened research and development tax credit, we draw attention to recent developments in the Middle Kingdom, as reported earlier this month in The Financial Times:

China has overtaken Japan to become the second biggest spender on research and development behind the US, a report from the Organisation for Economic Co-operation and Development revealed.

The country is expected to invest $136bn in research and development this year after growing by more than 20 per cent in the past year, ahead of the the $130bn from Japan but still well behind the $330bn the US will invest, the OECD said.

The OECD report is available here.

You can read the text of the relevant R&D tax provisions adopted by Congress last weekend at the R&D Credit Coalition’s website, available here in .pdf format.

Ken Jarboe of The Athena Alliance has blogged on China’s soaring R&D investment at the alliance’s weblog, The Intangible Economy, with posts here and here.

Seems like a permanent R&D tax credit — a stronger, more flexible credit that doesn’t expire every two years or so — might be a good issue for the 110th Congress to tackle, doesn’t it?